US stocks rise to the brink of a record and recover nearly all their 20%
springtime drop
[June 27, 2025] By
STAN CHOE
NEW YORK (AP) — The U.S. stock market ran up to the edge of another
record on Thursday.
The S&P 500 climbed 0.8% and is sitting just 0.05% below its all-time
closing high, which was set in February. It briefly topped the mark
during the afternoon in the latest milestone for the index at the heart
of many 401(k) accounts, which had dropped roughly 20% below its record
during the spring on worries about President Donald Trump’s tariffs.
The Dow Jones Industrial Average rallied 404 points, or 0.9%, and the
Nasdaq composite gained 1%.
McCormick, the seller of cooking spices, helped lead the way and jumped
5.3% after delivering a better-than-expected profit report. The company
also gave a forecast for profit over its full fiscal year that topped
analysts’ expectations, including planned efforts to offset increased
costs caused by tariffs.
Over the longer term, it’s been big technology stocks that have led the
market for years and since the S&P 500 hit a bottom in April.
Chip company Nvidia, which has been the poster child of the frenzy
around artificial-intelligence technology, added 0.5%. It’s the most
valuable company in the U.S. stock market after rushing 61% higher since
April 8, towering over the S&P 500’s gain of 23%. Another AI darling,
Super Micro Computer, rose 5.7% to bring its gain since April 8 to 55%.
Micron Technology, which sells computer memory and data storage, swung
between gains and losses after reporting stronger profit and revenue for
the latest quarter than analysts expected. CEO Sanjay Mehrotra said it’s
seeing growing AI-driven memory demand, and the company gave a forecast
for profit in the current quarter that topped analysts’ expectations.
Its stock ended the day down 1%.
All told, the S&P 500 rose 48.86 points to 6,141.02. The Dow Jones
Industrial Average rose 404.41 to 43,386.84, and the Nasdaq composite
gained 194.36 to 20,167.91.
Wall Street’s worries about Trump’s tariffs have receded since the
president shocked the world in April with stiff proposed levies, but
they have not disappeared. The wait is still on to see how big the
tariffs will ultimately be, how much they will hurt the economy and how
much they will push up inflation.
The economy so far seems to be holding up OK, though slowing, and more
reports arrived on Thursday bolstering that. One said that orders for
washing machines and other manufactured goods that last at least three
years grew by more last month than economists expected. A second said
fewer U.S. workers filed for unemployment benefits last week, a
potential signal of fewer layoffs.
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A Wall Street sign hangs near to the New York Stock Exchange,
Wednesday, June 18, 2025, in New York. (AP Photo/Yuki Iwamura)
A third report said the U.S. economy
shrank by more during the first three months of 2025 than earlier
estimated. But many economists say those numbers got distorted by a
surge of purchases of foreign products by U.S. companies hoping to
get ahead of tariffs. They’re expecting a better performance in
upcoming months.
Following the reports, Treasury yields swiveled up and down in the
bond market before easing.
The yield on the 10-year Treasury fell to 4.24% from 4.29% late
Wednesday. The two-year Treasury yield, which more closely tracks
expectations for what the Federal Reserve will do, fell to 3.71%
from 3.74% late Wednesday.
Analysts said yields may have felt pressure because of a report from
The Wall Street Journal saying Trump could name his nominee to
replace Fed Chair Jerome Powell unusually early, in an attempt to
undermine him. That could hurt confidence among investors about the
Fed’s capability to make unpopular decisions when it comes to
fighting inflation.
Powell has been repeating recently that the Federal Reserve is
waiting to see how Trump’s tariffs will affect the economy before
deciding when to resume cutting interest rates. It has been on pause
this year because lower rates can give inflation more fuel, along
with providing the economy a boost.
Trump, though, has been adamant about wanting cuts to rates sooner
and has insulted Powell repeatedly. Two of his appointees to the Fed
have also said recently that they would consider cutting rates as
soon as the Fed’s next meeting in July.
“Yields fell, the dollar weakened, and break evens rose, all
suggesting that a puppet of the White House in the seat of the Chair
could be bad for inflation,” said Brian Jacobsen, chief economist at
Annex Wealth Management. But Jacobsen said decisions on interest
rates would still rest with a committee of Fed officials, not just
the chair, and other officials could possibly keep the new leader
“in check if needed.”
In stock markets abroad, indexes were mixed in Europe following a
mixed finish in Asia.
Japan’s Nikkei 225 rose 1.6%, and South Korea’s Kospi fell 0.9% for
two of the bigger moves.
___
AP Business Writer Elaine Kurtenbach contributed.
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